Draft for Comments of the Stakeholders

TELECOM REGULATORY AUTHORITY OF INDIA

Draft
The Telecommunication Tariff (Sixty Sixth Amendment) Order,
2021
(________ of 2021)

New Delhi, 24.11.2021

Mahanagar Doorsanchar Bhawan,

Jawaharlal Nehru Marg,
New Delhi 110 002
Stakeholders are requested to send their written comments on
the Draft Telecommunication Tariff (Sixty Sixth Amendment)
Order, 2021 by 8th December 2021 to the Advisor (F&EA), TRAI
New Delhi preferably in electronic form at email id:
advfea2@trai.gov.in. For any clarification/information, Sh. Amit
Sharma, Advisor (Finance & Economic Analysis), TRAI, may be
contacted at Telephone Number +91-11-23234367, Fax Number
+91-11-23235249.
 TO BE PUBLISHED IN THE GAZETTE OF INDIA,
EXTRAORDINARY, PART III, SECTION 4

TELECOM REGULATORY AUTHORITY OF INDIA

DRAFT NOTIFICATION

New Delhi, the …………, 2021

F. No. C/(5)/2021-FEA-II ---- In exercise of the powers conferred upon it under
sub-section (2) of section 11, read with sub-clause (i) of clause (b) of sub-section
(1) of the said section, of the Telecom Regulatory Authority of India Act, 1997 (24
of 1997), the Telecom Regulatory Authority of India hereby makes the following
Order further to amend the Telecommunication Tariff Order, 1999, namely:-

THE TELECOMMUNICATION TARIFF (SIXTY SIXTH AMENDMENT)

ORDER, 2021
(No. .... of 2021)

1. (1) This Order may be called the Telecommunication Tariff (Sixty Sixth
Amendment) Order, 2021.
(2) It shall come into force from the date of its publication in the Official
Gazette.
2. In Schedule II to the Telecommunication Tariff Order, 1999, under item
(8), for sub-item (8.a), the following sub-item and entry relating thereto shall be
substituted, namely:-

ITEM TARIFF
“(8.a) Charge for outgoing
USSD session for USSD-based Nil”
mobile banking and payment
services

(Dr. M.P. Tangirala)

Pr. Advisor (F&EA)
Note 1. - The Telecommunication Tariff Order, 1999 was published in the
Gazette of India, Extraordinary, Part III, Section 4 under notification No.
99/3 dated 9th March, 1999, and subsequently amended as given below:-

Amendment No. Notification No. and Date

1 st 301-4/99-TRAI (Econ) dated 30.03.1999
2 nd 301-4/99-TRAI(Econ) dated 31.05.1999
3 rd 301-4/99-TRAI(Econ) dated 31.05.1999
4th 301-4/99-TRAI(Econ) dated 28.07.1999
5 th 301-4/99-TRAI(Econ) dated 17.09.1999
6 th 301-4/99-TRAI(Econ) dated 30.09.1999
7 th 301-8/2000-TRAI(Econ) dated 30.03.2000
8th 301-8/2000-TRAI(Econ) dated 31.07.2000
9 th 301-8/2000-TRAI(Econ) dated 28.08.2000
10 th 306-1/99-TRAI(Econ) dated 09.11.2000
11 th 310-1(5)/TRAI-2000 dated 25.01.2001
12th 301-9/2000-TRAI(Econ) dated 25.01.2001
13th 303-4/TRAI-2001 dated 01.05.2001
14 th 306-2/TRAI-2001 dated 24.05.2001
15 th 310-1(5)/TRAI-2000 dated 20.07.2001
16 th 310-5(17)/2001-TRAI(Econ)dated 14.08.2001
17th 301/2/2002-TRAI(Econ) dated 22.01.2002
18 th 303/3/2002-TRAI(Econ) dated 30.01.2002
19 th 303/3/2002-TRAI(Econ) dated 28.02.2002
20 th 312-7/2001-TRAI(Econ) 14.03.2002
21st 301-6/2002-TRAI(Econ) dated 13.06.2002
22 nd 312-5/2002-TRAI(Eco) dated 04.07.2002
23 rd 303/8/2002-TRAI(Econ) dated 06.09.2002
24 th 306-2/2003-Econ dated 24.01.2003
25 th 306-2/2003-Econ dated 12.03.2003
26th 306-2/2003-Econ dated 27.03.2003
27 th 303/6/2003-TRAI(Econ) dated 25.04.2003
28 th 301-51/2003-Econ dated 05.11.2003
29 th 301-56/2003-Econ dated 03.12.2003
30th 301-4/2004(Econ) dated 16.01.2004
31 st 301-2/2004-Eco dated 07.07.2004
32 nd 301-37/2004-Eco dated 07.10.2004
33 rd 301-31/2004-Eco dated 08.12.2004
34th 310-3(1)/2003-Eco dated 11.03.2005
35th 310-3(1)/2003-Eco dated 31.03.2005
36 th 312-7/2003-Eco dated 21.04.2005
 37th 312-7/2003-Eco dated 02.05.2005
38th 312-7/2003-Eco dated 02.06.2005
39th 310-3(1)/2003-Eco dated 08.09.2005
40th 310-3(1)/2003-Eco dated 16.09.2005
41st 310-3(1)/2003-Eco dated 29.11.2005
42nd 301-34/2005-Eco dated 07.03.2006
43rd 301-2/2006-Eco dated 21.03.2006
44th 301-34/2006-Eco dated 24.01.2007
45th 301-18/2007-Eco dated 05.06.2007
46th 301-36/2007-Eco dated 24.01.2008
47th 301-14/2008-Eco dated 17.03.2008
48th 301-31/2007-Eco dated 01.09.2008
49th 301-25/2009-ER dated 20.11.2009
50th 301-24/2012-ER dated 19.04.2012
51st 301-26/2011-ER dated 19.04.2012
52nd 301-41/2012-F&EA dated 19.09.2012
53rd 301-39/2012-F&EA dated 01.10.2012
54th 301-59/2012-F&EA dated 05.11.2012
55th 301-10/2012-F&EA dated 17.06.2013
56th 301-26/2012-ER dated 26.11.2013
57th 312-2/2013-F&EA dated 14.07.2014
58th 312-2/2013-F&EA dated 01.08.2014
59th 310-5 (2)/2013-F&EA dated 21.11.2014
60th 301-16/2014-F&EA dated 09.04.2015
61st 301-30/2016-F&EA dated 22.11.2016
62nd 301-30/2016-F&EA dated 27.12.2016
63rd 312-1/2017-F&EA dated 16.02.2018
64th 301-20/2018-F&EA dated 24.09.2018
65th 301-03/2020-F&EA dated 03.06.2020

Note 2.- The Explanatory Memorandum explains the objects and reasons for
Telecommunication Tariff (Sixty Sixth Amendment) Order, 2021.
 EXPLANATORY MEMORANDUM

1. Section 11(2) of the Telecom Regulatory Authority of India Act, 1997

empowers the Telecom Regulatory Authority of India (hereinafter referred
to as the Authority) to notify rates for various telecommunication
services. In exercise of these powers, the Authority has been notifying
tariffs for various telecommunication services including Unstructured
Supplementary Service Data (USSD) based mobile banking and payment
service. The tariffs for USSD based mobile banking and payment service
have been regulated in the form of ceiling tariffs prescribed by the
Authority under item (8) of Schedule II of the Telecommunication Tariff
Order 1999, as amended from time to time.
2. In December, 2011, DoT allocated a USSD code *99# to Department of
Financial Services (DFS) for mobile banking services through the USSD
gateway of National Payment Corporation of India (NPCI) and asked the
Telecom Service Providers (TSPs) to connect to it as per the requirement of
service in consultation with NPCI. In April, 2012, TRAI mandated that
every TSP shall facilitate the banks to use USSD to provide banking
services to its customers in not more than two stage entry of options in the
case of USSD. In November, 2012, NPCI launched a USSD Gateway
(National Unified USSD Platform) for enabling mobile banking through the
USSD channel. The Authority through the Mobile Banking (Quality of
Service) (Amendment) Regulations, 2013, increased the maximum number
of stages for completing a mobile banking transaction from two to five,
primarily to increase the number of banking services available to USSD
consumers.
3. In November 2013, through Telecommunication Tariff (Fifty Sixth
Amendment) Order, 2013, the Authority prescribed a ceiling tariff of Rs.
1.50 per USSD session for USSD-based mobile banking service and
established a framework to facilitate the agents of the banks to interface
with the access service providers for use of USSD to provide mobile
banking services.
4. Subsequently, in November 2016, with a view to facilitate mobile banking
through USSD for financial inclusion, the Authority revised USSD ceiling
tariff through the Telecommunication Tariff (Sixty First Amendment)
Order, 2016 and the Mobile Banking (Quality of Service) (Second
Amendment) Regulations, 2016. This led to USSD-based tariff ceiling for
banking and payment services to reduce from Rs. 1.50 to Rs. 0.50 per
session and the number of stages were increased from five to eight stages
per USSD session. The Authority also suggested various mechanisms for
the NPCI/Banks to popularise this service viz. improvement in software
 feature, design user-friendly menu, increase consumer awareness, develop
Unified USSD platform to support transaction across all payment
platforms, to increase usage and popularity of this service.
5. With a view to encourage digitization of payments and enhancing financial
inclusion through digitization, the Reserve Bank of India (RBI) constituted
a High-Level Committee on Deepening of Digital Payments (CDDP) under
the Chairmanship of Sh. Nandan Nilekani. The committee in its
Recommendation 72 aimed at Improving USSD usage. The
recommendations inter alia stated that “In order to improve usage of USSD,
the committee recommends charges for USSD usage be further rationalised
and this technology be made feature rich. Rationalizing of USSD charges:
There is need to relook at USSD SMS charges with a view to reduce its price
and increase its adoption and popularity.”
6. In view of the above recommendations, RBI urged TRAI for a follow-up
action on the Recommendation no. 72 of CDDP on rationalization of USSD
charge and provide the required regulatory framework for the same.
7. From time to time, NPCI has also acknowledged that since users are not
charged for any other mobile banking app but only USSD so this could be
the main reason for low adoption, hence, advocated waiving off these
charges to help in its faster adoption.
8. Further from the financial inclusion perspective, Department of Financial
Services (DFS) also supported the recommendations made by the High-
Level Committee on CDDP and the suggestions given by NPCI. In this
regard, DFS has also requested the Authority for waiving off USSD charges
to facilitate faster adoption of this service by common people especially in
rural/ difficult areas, the segment of population for whom the Pradhan
Mantri Jan Dhan Yojana (PMJDY) Accounts scheme has been established
to promote financial inclusion.
9. While the appropriate level of tariff per USSD session is being deliberated
upon, it is relevant to mention that in the recent years, the trend in telecom
industry has shifted towards bundled offers wherein telecom companies
are selling two or more products as one combined product or service
package. The “bundled offerings’’ include, inter alia, voice, data, SMS, and
content. These are presently available across almost all product types and
for almost all packages of different validity periods and are gaining
popularity.
10. However, a customer opting for a bundled offer needs to have a separate
monetary value to avail the USSD service. More so, even the minimum
amount spent for a monetary value recharge, is generally much higher
than the charges incurred for a USSD transaction. Thus, consumer has to
spend more amount than his requirement for a USSD transaction. It is
also noted that the consumer is being charged for both successful as well
 as failed transactions. This unnecessarily puts extra financial burden on
the customer, given the potential popularity of USSD amongst rural,
under-privileged and low-income groups.
11. Further, rationalization of USSD charges to bring it in line with other
services, requires examination of the present level of tariffs for the major
services being offered by the TSPs. As per the information furnished by the
TSPs to the Authority, the level of tariffs for Wireless service for the Quarter
Ending June 2021 are given in Table 1.1 below:

Table 1.1: Average tariffs for Wireless service for the Quarter
Ending June 2021
Item Value for Wireless
service
Average tariff for outgoing voice call Re. 0.04 per minute
(Average outgo per outgoing minute)
Average tariff for outgoing SMS message Re. 0.01 per SMS

12. The table above indicates that the present tariff per USSD session for
mobile banking offered by TSPs is several times higher than the average
tariff for 1 minute of outgoing voice call, or 1 outgoing SMS. The relatively
high charge for USSD is thus acting as an impediment in increasing the
number of transactions despite significant improvement in success rate of
transactions. Considering the decline in charges for other services, the
rationalization of USSD charges is required to increase the number of
USSD transactions.
13. Therefore, the Authority is of the view that in order to protect the interests
of the USSD target user groups and to promote digital financial inclusion,
rationalisation of these charges is a necessity.
14. In line with the foregoing, the Authority proposes to revise the framework
for USSD based mobile banking and payment services by prescribing a
“Nil” charge per USSD session for mobile banking and payment service,
while keeping the remaining aspects unchanged. The Authority may review
the charge after a period of two years, based on experience gained.